VW says Chattanooga is first choice to build EVs for U.S.

LOS ANGELES -- Volkswagen's underused U.S. plant in Chattanooga is the leading candidate to build the company's upcoming lineup of electric vehicles for the U.S., according to high-ranking brand executives speaking in Germany and at the Los Angeles auto show.

"The electric vehicle is also going to be an option in the U.S.," VW brand boss Herbert Diess told reporters at the company's headquarters in Wolfsburg, Germany, according to The Wall Street Journal. "We haven't taken a formal decision yet, but Chattanooga is our first choice."

Speaking in Los Angeles, Hinrich Woebcken, CEO of Volkswagen Group of America, told reporters that holding down production and supply costs will be key as the brand launches the first of at least four planned vehicles based on its MEB EV platform. The first vehicle, an all-wheel-drive crossover dubbed the I.D. Crozz, will debut in 2020 with 302 hp and an expected range of up to 300 miles on a full charge, Woebcken said.

Brand officials expect to offer the I.D. Crozz at a price roughly the same as its three-row Atlas crossover, which begins at $31,425, including shipping, and rises to more than $49,000.

After the I.D. Crozz, the brand plans to introduce an EV version of its iconic Microbus called the I.D. Buzz in 2022, as well as a hatchback and sedan. Because the vehicles will share the MEB platform, they could be built in the same plant. The brand wants to sell 1 million EVs annually by 2025 at it transitions from its former reliance on diesel engines.

VW's Chattanooga plant builds the Atlas and the Passat sedan. While sales of the Atlas have been strong during its launch, Passat sales have suffered in the U.S. as consumers continue to move from sedans to crossovers. This year through October, U.S. sales of the Passat have fallen 8 percent from a year earlier to 54,567.

In the same period, U.S. sales of VW brand vehicles have risen 9.4 percent to 280,188. Woebcken said he expects the brand's upward sales trend to continue through year end.

VW said Thursday its Zwickau plant in Germany will be the production hub for EVs sold in Europe, starting with the I.D. hatchback which launches in the region in 2020.